New labor law causes workers more distress
Ridwan Max Sijabat, The Jakarta Post, Jakarta
A labor union has cried out against the nationwide trend of outsourcing, labor layoffs and dismissals that have helped employers raise efficiency levels amid the prolonged economic hardship, but have worsened workers' situation.
Muda Alexander Sinaga, chairman of the Pharmaceuticals, Health and Services Trade Union, a member of the All-Indonesia Workers Union Confederation, said following the March 2003 enforcement of the controversial Labor Law No. 13/2003, outsourcing had become a nationwide trend for companies to cut down labor costs.
"Thousands of workers return home jobless almost every week because their contract was not extended after two or three years on the job, or many companies lay off a great number of their workers and then dismiss them," he told The Jakarta Post on Wednesday.
Sinaga also cited another trend, that many private and state companies had cut labor costs by changing the status of their permanent workers to contract workers.
"Many companies have 'forced' workers, who have been working for a company for over 10 years, to resign of their own will, and then rehire them as contract workers to raise efficiency," he said, adding that employers made the move after procuring approval from the Central Committee for the Settlement of Labor Disputes (P4P).
Unlike the previous law, Labor Law No. 13/2003 has sparked strong opposition from numerous labor unions, as it allows employers to lock out their companies, lay off workers and even dismiss workers for reasons of efficiency or bankruptcy.
The government recently gave approval to the management of state-owned aircraft manufacturing company PT Dirgantara Indonesia in Bandung, West Java, to lay off around 6,000 of its 9,350 workers for efficiency purposes. Dirgantara then dismissed them after it decided to close down several divisions in the holding company.
The P4P and Minister of Manpower and Transmigration Jacob Nuwa Wea, who has veto power, have permitted dozens of companies to lay off workers and dismiss them for similar reasons.
On Wednesday, thousands of workers took to the streets in Semarang, capital of Central Java, to protest the increasing labor layoffs and dismissals in the province. The following day, thousands of workers went on a similar strike in Medan, provincial capital of North Sumatra.
In a separate case, over 150 of the 1,600 laid-off workers of publicly listed PT Sarasa Nugraha in Tangerang, Banten, spent eight nights at the manpower ministry, demanding the government enforce the P4P's ruling that the management pay workers their salaries for the last seven months and maximum severance pay as stipulated in Article 150 of the Labor Law. The P4P had also approved on July 7 the management's dismissing the workers.
Alboin Sidabutar, chairman of the Textile, Garment and Leather Trade Union, said the prevalent outsourcing and dismissals of workers were inevitable, since Indonesia could not compete in the era of free trade and globalization.
"Many labor-intensive companies in the textile and leather industries have closed down operations and dismissed their workers, because their products cannot compete with similar products from other countries such as China, Thailand and Malaysia," he said.
Gandhy, director of industrial relations at the manpower ministry, confirmed that labor disputes had generally been on the rise, mainly because of misinterpretations of the new labor law.
The ministry's director general of industrial relations, Muzni Tambusai, concurred recently and said the ministry was in the midst of preparing a decree to regulate outsourcing and the use of contract-based workers.
"The decree will declare that companies are allowed to subcontract certain jobs not included in their core business to other companies, but the outsourced company is required to recruit and employ permanent workers in accordance with the law," he said.